buyers

Sellers & Buyers Negotiate … Agents Advise

Sellers & Buyers Negotiate … Agents Advise

The ability to negotiate successfully is crucial not only for successful real estate transactions, but also for daily life events in general. As your agent my job is to advise and counsel you and present your offer/counter offer in the absolute best way possible, but you are the only one who can negotiate in a real estate transaction … it’s your money and your choice what to do with it.

Here are some general guidelines:

Challenge the ideas that are presented to you

Negotiating requires you to be assertive and question what you are being told. If you disagree with someone regarding the price, value or condition, speak your mind. Of course, be sure to do so diplomatically.

Become a good listener

Listening carefully and critically thinking about what you are being told can prevent a considerable amount of confusion and ensure that the negotiations run smoothly.

Be prepared

If you’re buying, what exactly does the property have that could take away from its value? What is community like? What is the average selling price in the neighborhood? If you’re selling, know your property extremely well; you cannot allow yourself to be taken aback by what a prospective buyer might say.

Aim high

If you’re selling, try marking the price of your home about 5% above what you would actually want. This will leave you some negotiating space to come down. If you’re a buyer, offer a price that is lower than what you normally would; enter negotiations with the optimistic attitude that the seller will come down.

Just a little patience

Relax. This could take a while.

Be diplomatic

Because negotiations may be a long and tedious process, it can be very easy to get irritated. Getting frustrated with negotiations that seem to be going nowhere will only perpetuate any difficulties you may be having, and may even result in an end to all talks. Keep your cool.

Be aggressive

While you don’t want to be hostile, you do want to be assertive and dominate negotiations. When negotiating with the prospective buyer or seller’s agent, be sure to try to take control of the negotiations. Talk with a strong and confident voice, and be sure to have responses for any potential arguments that may be thrown your way.

Don’t get nothing for something.

Whenever you agree to give something, be sure to get something in exchange. For example, if you are the seller and you agree to lower the price, you may want to hold back on any additional goods that you may have initially been willing to give away (like furniture).

Always give the appearance of being willing to walk away

Even if you are in love with the property as a buyer or are dying to sell as the owner, never reveal your desperation. Always give the impression that you will be willing to walk away.

Time is on your side

It’s most likely that you and the other party are eager and pressured to resolve the transaction. Acting calm and under control, in addition to taking time to think rationally, will help you in the long run. In short, just think before you speak.

Closing Checklist … Items You’ll Need at Your Closing

Closing Checklist … Items You’ll Need at Your Closing

Okay, so now you’ve bought/sold a house and the closing is happening soon.

If it’s your first time or your first time in a long while here’s a quick primer.

If you bring the following, you should have everything you need.

  • New Deed drawn up by your attorney. (sellers)
  • Smoke Detector & Carbon Monoxide certificate of compliance (sellers)
  • Title V certificate of compliance (if serviced by private sewer) (sellers)
  • Final water/sewer bill, stamped paid in full (if municipal service not serviced by well) (sellers)
  • Keys and garage door openers ( leave duplicates in a drawer in the house) (sellers)
  • Copies of any paid bills or affidavits required for work done after home inspection issues were negotiated. (sellers)
  • Instruction booklets, receipts, builder drawings and anything else you have that the buyer could find very useful after moving in to your home (leave them in a drawer in the house). (sellers)
  • Copy of receipt or statement for fuel oil in the oil tank and/or propane in the propane tank (if applicable) (sellers)
  • Driver’s license or another form of personal identification. (sellers & buyers)
  • Your personal checkbook for miscellaneous items and/or adjustments. (sellers & buyers)
  • Certified check or cashier’s check drawn in Buyer’s name or whatever the conveying attorney specifies for the difference between the sale price of the property and the amount of the mortgage less any deposit already made. The final amount will be spelled-out in detail on the form known as the HUD1. (buyers)
  • At the closing, the bank may require 2-3 months tax payment (to be held in Escrow by the Bank); PMI when applicable will be collected for the first year. The exact amount can be obtained from the mortgaging bank prior to the closing; it will be spelled-out in detail on the  HUD1. (buyers)
  • Additional fees can be paid with cash or personal checks. The exact amount can be obtained from the bank’s attorney prior to or at the closing. (buyers)
  • Personal property of the sellers can be paid with cash or personal checks. (buyers)
  • Remaining fuel oil in the oil tank (if applicable) can be paid with cash or personal checks. (buyers)
  • Paid insurance policy or binder for the new property (whichever the conveying attorney specifies) in an amount equal to the amount of the mortgage. Ask your insurance agent for advice on this matter. (buyers)
Can you buy/sell a house with a failed septic system?

Can you buy/sell a house with a failed septic system?

Although they are very common in Metrowest, not all homes have septic systems. A system that no longer functions as designed is considered “failed” and while they are always problematic,  they can be incorporated into a real estate sale and get you to the closing table in one of three ways.

First, you can undertake the work and complete it prior to closing, with a full sign-off from the Board of Health in the form of a Title 5 Certificate of Compliance. This is often the preferable course for all parties and a lender, if any, and this option will get you the highest selling price for your home. You will need a design and this takes time for testing holes and design approvals so plan accordingly. If you’re short of funds, some septic installers will begin and complete the work slightly before the closing date and get paid out of the seller funds at the closing. This would require you to agree to release the funds directly to the installer at the closing.

Alternately, Title 5 does not require that a system be in passing condition prior to the sale, but most lenders will not issue a mortgage until the failing system is upgraded or funds to perform the upgrade are escrowed.

So you and the Buyers can agree to put an appropriate amount of money in escrow guaranteeing that the system will be installed after the closing. The usual formula for calculating this amount is taking the median of three bids plus a 50% contingency reserve. Most installers are able to give solid estimates based on a design, but they will charge more it they hit ledge, or other unforeseen conditions, so the contingency is there just in case. Again, this would require you to agree to release the funds from the closing to the escrow account. The escrow funds are usually held by the bank’s conveying attorney who will pay the bill for the septic when it’s completed, and then return any extra money to you. Many lenders don’t allow septic hold-backs at all, so this option, while an excellent solution if you’re tight for funds, might limit your pool of buyers and thus extend your time on market, but it won’t affect the price you’ll get for the home. Here’s an example of how this might work: A home is on the market for $300K with a failed Title 5. A buyer agrees to purchase the property, and they both agree to put the septic repair money in escrow. The median estimate is $30,000 for the system. The buyer, at the closing, pays the seller 300K, and the seller then pays of his mortgage (100K, for example) and then takes 150% of the 30K ($45,000) and puts that in escrow with the closing attorney. The seller leaves the closing table with $155,000. The buyer then has the new system put in place, and it only costs $30,000. The buyer sends the bill to the closing attorney, who pays the installer, and refunds the difference ($15,000) to the seller. There are variations on how this unfolds, but this would be a typical scenario.

A third option would be to get the buyer to pay for the septic system, although this is less likely to occur. A buyer who agrees to assume the cost of replacing the septic system will factor the cost of replacement plus a contingency factor into his bid price for the property. If it costs less than he planned, he pockets the difference. This would most likely have to be a buyer who can pay cash for your home. Most municipalities will allow him up to a year to fix the septic system and update the Title 5. But if the septic system isn’t working, the Board of Health can require that nobody will be living there. Not many people can buy properties with cash, so counting on this option will severely restrict your buyer pool, exponentially lengthen your market time, and ultimately get you less money for your home. So, in summary, bottom line … marketing your home with a failed septic system will affect the property’s value and restrict the pool of buyers, but it has been done many times successfully and with the right agent (shameless plug for “me”) you can do it too.

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